One Step Shy Of An IPO, Telco Friend Openet Picks Up $21M Series D Led By Japan’s NS Solutions

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Waiting for the public markets to show a little more promise for tech IPOs, Openet has today announced that it’s completed a Series D round of funding totaling $21 million: $16 million in equity funds and $5 million in long term debt. Openet is a Dublin, Ireland-based developer of transaction management software used by 80 network operators in 28 countries — including AT&T, BT, Orange, Verizon and Vodafone — to do things like work out new ways to charge users for the amount of data they use.

The round was led by NS Solutions, a Japan-based IT solutions provider that is a subsidiary of the industrial powerhouse Nippon Steel. As a result, NS Solutions becomes a distribution partner of Openet’s, specifically to resell its services in Japan — and the first customer win for the two is a biggie: the mobile operator Softbank. Others participating in the round included Balderton Capital, Cross Atlantic and Kreos Capital.

Openet has also added a new person to its management board: Margaret Rice-Jones, the ex-CEO of Irish carrier Aircom, is now a non-exec director.

Openet says it will be using the funding to build out its distribution channels — that may include more distribution deals in addition to the reselling agreement with NS Solutions — as well as for product development, product management and deployent engineering.

Openet specializes in the kind of network management software — real time network engagement, insight, monetization, and control – that is behind the scenes for consumers, but is extremely relevant to how they interact with their carriers — and, crucially, end up paying for services.

The company got some attention a while back for a slide it was distributing detailing how it could nuance network charging in such a way that certain kinds of content could be charged at different levels than other kinds: for example, video from YouTube, which might put more strain on a network, costing more to use than access to a text-based news site.

That raises all sorts of questions about net neutrality and privacy and may not have legs on those grounds, but you could also see something like this potentially getting implemented by operators looking to, for example, develop incentives to use certain services over others, based on their own commercial relationships with certain content companies.

“It’s a very disruptive model in how it focuses on the use of data,” says Barry Maloney, a partner at Balderton who sits on Openet’s board. He declined to comment on when Openet might go public in the current climate, but he did add that this new injection of investment and business opportunity with NS Solutions gives the company “a good insurance policy and momentum going forward” as an ongoing private concern.

The company has been profitable for the last two years, and in 2011 had a turnover of about €90 million ($120 million).

The other area where Openet has had some attention of late is in an IP infringement case brought against it last year by its competitor Amdocs. But with the company continuing to expand — it grew revenues by 23 percent last year, Maloney notes — “Clearly the case hasn’t stopped corporate development and confidence in the company.”